| 21/10/2022 | 14/10/2022 | %Change | YTD | |
| Euro / LP | 1,471.33 | 1,468.46 | 0.20% | -13.89% |
| Euro / Dollar | 0.9760 | 0.9741 | 0.20% | -13.89% |
| NEER Index | 173.49 | 173.43 | 0.04% | 15.76% |
Lebanese Forex Market
To-date, the Lebanese Pound (LBP) remained steady within the official range of USD/LBP 1,514 to 1,514.5, with a mid- price of USD/LBP 1,514.25 by October 21, 2022.
Meanwhile, on the parallel market this week, the Lebanese national currency has fluctuated around LBP/USD 40,174 with a minimum of LBP/USD 39,800 and ended the week at LBP/USD 40,400, an all-time high level since start of the financial crisis.
As for the Euro/LBP currency pair, the Euro appreciated against the dollar-pegged LBP with the currency pair going from last week €/LBP 1468.46 by October 14, 2022 to €/LBP 1,471.33 by October 21, 2022. Moreover, the Nominal Effective Exchange Rate (NEER) of the Lebanese pound increased marginally by 0.04% weekly to stand at 173.49 points on October 21, 2022.
International Forex Market
The US dollar remained resilient against its major competitors early Friday; in more details, the dollar index increased against the six major currencies, and traded 0.31% higher at $113.36, up from last week $113.01.
The Euro slightly rose against the dollar by the end of the week, closed at $0.976, despite rising inflation and weakening economy. Furthermore, the hike in interest rates led by the European Central bank points to a gloomy scenario for the bloc.
Meanwhile, the GBP/USD price slumped strongly this week and stood at 1.1133 on October 21, 2022. Indeed, Liz Truss resigned as UK prime minister, after a brief and chaotic tenure of only 44 days in office. As a result, she will be remembered as the prime minister whose grip on power was the shortest in Britain’s political history and leading to catastrophic damages to the ruling conservative party.
As for the Swiss Franc, it depreciated to 1.0108 on Friday, versus 1.0031 Swiss/ Dollar the previous week. Arguably, the Swiss franc is not highly valued since the country is ultimately facing challenges same as the European zone related to direct and indirect consequences of geopolitical developments such as inflation, raw material and energy prices, blocking the supply chain and energy supply.
Beyond Europe, the Japanese currency highly depreciated by 2.55% this week, reaching JPY/US 151.48. According to Bloomberg, Japan’s inflation rate reached 3% in September and is expected to accelerate further to hit the highest level in 40 years.
This week, the Chinese and Canadian currencies depreciated respectively against the dollar by 0.66% and 0.04%, reaching CNY/USD 7.246 and CAD/USD 1.3805. Similarly, the Australian currency depreciated by 0.54% to reach 0.6252 on Friday, October 21.
Commodities
Gold prices fell further by 1.6% on a weekly basis to $1,626.8/ounce, versus 1653.2/ ounce in the previous week. In fact, gold dropped to its lowest level since April 2020 as the Federal Reserve raised interest rates by 75 basis points in September, thus bringing the target for the benchmark federal funds to 3.25% and will keep on raising interest rates in the next meetings in November and December to tackle inflation. Also, the gold’s price decline is consistent with a stronger US dollar.
Crude oil prices decreased significantly by 4.32% this week to $84.65/barrel compared to $88.47/ barrel in the previous week. In fact, the US president Joe Biden is set to release 14 million barrels of oil from US emergency reserves in order to cool rising gas prices ahead of midterm elections.